Home Foreign UNITED KINGDOM-AFRICA TRADE SUMMIT – AN OPPORTUNITY FOR AFRICA’S LEADERS TO ASK...

UNITED KINGDOM-AFRICA TRADE SUMMIT – AN OPPORTUNITY FOR AFRICA’S LEADERS TO ASK FOR SOLID COMMITMENTS FROM WESTERN LEADERS ON ILLICIT FINANCIAL FLOWS FROM AFRICA & TAFAWA BALEWA’S OAU SPEECH ON AFRICA

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A joint panel run by the United Nations and the African Union and led by former South African President Thabo Mbeki has discovered that about as much as $60 billion is illegally taken out of Africa annually by companies and government of the developed nations.   According to the report, depriving the world’s poorest continent of capital and tax revenue that could spur faster economic growth is one of the reasons for Africa’s stunted growth.  The Report that the methods some companies use to send money out of the continent illicitly is disturbing and says further that: ‘’The losses are staggering not only in terms of foreign currency involved,  but development opportunities lost.

Mbeki, Chairman of the High Panel that examined this problem disclosed that:  “We are talking about large volumes of capital that could play a great role in addressing Africa’s development challenges,” he said in an interview with Wall Street Journal. The scams range from loggers in Mozambique understating the value of the timber to Nigerian officials who send abroad suitcases of illegally earned cash.

The panel estimated illicit outflows in part by adding up discrepancies between the reported value of African exports and the higher value those same goods sometimes receive when they arrive as imports to Africa’s trading partners. That investigation showed that most African governments were victims of companies or officials secreting profits and cash out of countries. Mr. Mbeki said he couldn’t name particular companies that may be at fault because their dealings with tax authorities are confidential. But he did say “large commercial corporations are by far the biggest culprits of illicit outflows, followed by organized crime.”

The Wall Street Journal wrote that: ‘’the problem isn’t unique to Africa. Taken together, about US$ 1trillion was lost to illicit channels in 2012, according to the Washington-based research and advocacy group Global Financial Integrity. But economists say Africa suffers most because its governments lack the institutions and expertise to spot and stop capital flight. In some countries, regulation is too decentralized—Nigeria alone has 12 agencies with some responsibility for stemming illicit flows— offering wide regulatory and enforcement cracks for those who want to exploit them.

It continued: And Africa’s 54 countries have little capacity to exchange information or help each other pursue potential tax dodgers. “There should be an automatic exchange of tax information among African countries,” the report concludes. The loss of capital is particularly painful because Africa’s development needs are so acute. Even as 300 million Africans entered what the African Development Bank calls a nascent middle class in the past 25 years, rapid population growth pushed the number of people living on less than $1.25 a day to 414 million from 290 million.

While Africa’s economic growth of around 5% annually in the past decade has outpaced most other regions, Mr. Mbeki’s group said it won’t be enough to guarantee a better life for those hundreds of millions of poor Africans. “The benefits of this growth have mostly been confined to those at the top of the income distribution and it has not been accompanied by an increase in jobs,” wrote the group, officially called the High-Level Panel on Illicit Financial Flows from Africa.

 A COMMON PROBLEM DESERVING THE COOPERATION OF ALL AFRICANS: Thabo Mbeki noted that ‘’In Mozambique, the panel found, total declared exports of 260,000 cubic meters of logs were only about half of the amount China reported to have imported from the southern African country. That suggests that logging and shipping companies are intentionally underreporting the amount of wood they handle to pay lower taxes, the report argues.

In Nigeria, some companies and officials were colluding to secretly sell about 100,000 barrels of oil a day, a cottage industry the report described as “looting on an industrial scale.” And Ghana, Kenya and a half-dozen other African countries are believed to be losing tens of millions of dollars each year to a scheme mobile service providers use to make international calls appear to regulators as local calls, which are taxed at lower rates. Taken together, the panel said, illicit flows “are negating the expected positive impact of increased growth on the continent.”

Even as African countries work to stem the illicit flows, Mr. Mbeki said rich donors and trading partners must make their corporations pay the appropriate taxes for pursuing new customers and rich mineral deposits in Africa’s fast-growing markets. “This is a common problem,” Mr. Mbeki said. “All of us need to act in concert.”

THE QUESTIONS: Left Africa & the United Kingdom throw away diplomatic niceties and garbs and lock themselves up in a room to discuss how UK and the advanced world would assist Africa to arrest the sad trend of milking Africa illegally, thereby contributing to the adversities of the continent.  One of those issues that is ideal for discussions is the seeming eternity it takes in repatriating stolen funds back to Africa.  It takes two – the giver and the receiver to commit heinous financial crimes.

Therefore, United Kingdom, the developed world on one part;  and Africa on the other part are complicit. Let Africa’s leaders ask how possible is it, with the level of global technological advancements recorded so far, for billions of money denominated in foreign currencies to drop into an economy without an alarm sounding within the financial services sector. An improved trade may result in more incidents of Illicit Financial Flows; hence the requirement of commitments NOW. This is a good opportunity; your Excellencies.

TRUTH IS BITTER – TAFAWA BALEWA: Nigeria’s first Prime Minister Sir Abubakar Tafawa Balewa’s speech at the inauguration of the Organization of African Unity in Addis Ababa, Ethiopia in 1963 is relevant here. Balewa said: ‘’Now, Mr. President, the Hon. President of the Sudan, I think, when he spoke, told us that we should be frank. I think it was the President of Malagasy who said that we in Africa do not want to speak the truth. We have a saying in Nigeria, which is that ‘Truth is bitter’. Mr. President, I want to be frank; I want to tell the bitter truth. To my mind, we cannot achieve this African unity as long as some African countries continue to carry on subversive activities in other African countries.

ON FOREIGN AID/GRANTS:  I do not believe that any aid, no matter from where it comes, is without strings attached to it. Let us not fall into the same trap. If we assist any dependent territory in Africa, we must see to it that we do not attach conditions to our assistance. This is very, very important if we want to establish the solidarity of the continent of Africa, to make sure that any of assistance we give is free. It is good, Sir, that we have a common pool, but a conference like this cannot discuss the details of such an organization; and it is our view that, immediately after leaving this conference, or before we should appoint a committee—a standing committee—to go into the details of this matter. On the question of colonialism and racial discrimination, I am afraid that we in Nigeria will never compromise.

THE RESOURCES OF AFRICA: Now, I Come to a very vital matter, which is the development of continent. The African continent is very rich in resources but, unfortunately, these resources are not developed yet. We are born at a very difficult time: we have not the necessary capital, the necessary equipment, or the necessary know-how for the development of our continent. Therefore, we find it absolutely necessary to rely on outsiders for the development of the African territories. I would like to tell the conference that we must take every care to know whom we invite to assist in the development of our resources because there is a fear, which is also my personal fear, that, if we are not careful, we may have colonialism in a different form. Colonialism can take many different forms. Our countries can be colonized economically if we are not careful. Just as we have fought political domination, it is also important that we fight against economic domination by other countries.

Let us not forget that we in Africa are part of the world. We have our international obligations as well. Whatever we do, we cannot isolate ourselves from the rest of the world. Therefore, in all that we do, and in all that we say, we should be careful because we belong to one human society. Mr.  President, I always tell people that I do not believe in African personality, but in human personality. The African is a human being and, therefore, we have to see to the development of the human personality in Africa. I think any talk of African personality is based on inferiority complex.

 NO INFERIORITY COMPLEX: I do not regard any human being—red, white, brown, yellow or green—as superior to me. I regard myself as equal to anybody. I am a human being. Now, some people have suggested, and this is a thing which is already underway, the establishment of an African Development Bank. I hope that, when the Ministers of Finance of different countries of Africa meet in Khartoum, they will be able to produce something which should be of benefit to all of us.

 ON AFRICAN COMMON MARKET: Also, a suggestion has been made for the establishment of an African Common Market. This is a very good idea; but I must say that we in Nigeria feel that it is a very complicated matter. We want an African Common Market. But, can we do it by taking the continent as a whole? Or can we do it by certain groupings in Africa? What appears to us to be more practical is that we should have an African Common Market based on certain groupings. We are thinking, Sir, of a North African grouping, which will include the Sudan; a West African grouping which will extend to the River Congo; and an East African grouping, which will include the Central African countries.

If we base our examination on these groupings, I think we will arrive at a very successful establishment of African Common Market, because I think it is good for the trade Africa. For example, the inter-State trade in Africa is 10%, while 90% is done with countries outside Africa. There is no reason why we should not increase the inter-State trade on this continent.  I think, Sir, that if we are able to establish an African Common Mark we shall overcome many difficulties and we shall be in a position to stand on our own in relation to the other parts of the world. My fear of our being colonized will disappear if we are able to establish this African Common Market.

The question of disarmament was raised by several speakers. I think all of us feel strongly about this question. Although some feel that disarmament can never be achieved, still others feel that it is most important that the great Powers will continue to talk about it; because the more they talk about it, the less danger there would be of an open clash. I am glad that they have seen fit to invite some of the African countries to participate in their disarmament talks. The most essential thing which is desirable is to effect disarmament. It is desirable to ban nuclear testing; it is most important that we exercise every possible influence we can upon the great Powers to destroy those bombs which they have already got. If there is a war now, there would be nothing left—everything would go. We are now just starting to develop our country.

 The mere fact that Africa has been declared a nuclear-free zone will not make Africa free in the event of a world war. If there is war, we in Africa will be directly involved. It is our concern that there should be peace in the world, and that there should be understanding among the great Powers. Some people have suggested that we should organize ourselves into a Defence Bloc. Well, Mr. President and Your Excellencies, all of us have been talking about the bad nature of the armament race. It has been suggested that we should embark on an arms race in Africa. All of us know very well that we are at present incapable of joining in such a race. Our idea is that we should not be talking about an arms race. All we should talk about, Sir, is how to stop it, and I would not suggest that we should join in that race at all.

 REPRESENTATION IN THE UN SECURITY COUNCIL: A suggestion was also made that we should come together as a bloc in the United Nations. Well, that is a very good idea; but I must tell the conference that we in Nigeria hate the idea of blocs, and we do not like it.  If we can find some kind of name for it, such as the African committee or an African ‘something’, it will be much better, because the whole idea of blocs is revolting. I think we should try to find better names for these different groupings. 

 I think that we have been working for some time now in the United Nations where our different representatives meet and matters of common interest. May I suggest to the conference that it is time now that we find a permanent small secretariat or such an African Committee in New York? That does not mean, of course, that we will instruct our delegates to close their eyes the wider issues of world problems. But, as a Continent which has suffered for so long and also as a people who have suffered for so long, I think we have to do everything to get our proper position in the United Nations Organization.

 Some of us have suggested that we should seek greater representation in the Security Council and also in all the bodies of the United Nations Organization. Well, this has been our stand all the years we have been independent. I said so in New York; I said it in Monrovia. It is absolutely essential that the African continent must have more appropriate representation in the Security Council and all the bodies of the United Nations because we have more to gain thereby. That world organization, I have always maintained, is a sure guarantee of the independent sovereignty of our African states.